Consortium to build new nuclear power plant in Finland

COPENHAGEN (MarketWatch) -- Finnish steel company Outokumpu Oyj (OUT1V.HE) Wednesday said a consortium of industrial and energy companies have joined forces aiming to constructing a new nuclear power plant in Finland.

To implement the project, a new Finnish power company Fennovoima Oy will be established.

Fennovoima aims to construct a new 1,000 to 1,800 megawatt nuclear power plant for the increasing need for electricity in Finland.

The operation of the plant is aimed to start between 2016 and 2018.

Fennovoima will produce electricity for its owners' needs at production cost. Each owner will get the share of capacity proportional to its ownership in the company.

One-third of the capacity is reserved for Finnish enterprises of industry, merchandise and services, one-third for regional and local energy companies, and one-third for E.ON Suomi.

Approximately half of the capacity will be offered to companies other than the existing Fennovoima partners. Many Finnish enterprises have already shown their interest in acquiring own nuclear power generation capacity, Outokumpu said.

The consortium has started discussions with companies needing long-term procurement of stable-priced power for their own production and customers in Finland.

Energy is a major cost factor in producing stainless steel. In Outokumpu's case this is even more so as the group has its own ferrochrome smelter as part of the integrated stainless steel production operation in Tornio, Finland.

Although having ferrochrome production integrated into stainless steel production is already a cost advantage, that coupled with reliable stable-priced electricity supply in the future will be an additional competitive advantage.

Outokumpu's Tornio Works currently consumes some 2.1 terra-watt hours of electricity per annum.

Fennovoima will immediately start studies on the construction of the new nuclear power plant. Apart from the site, these include safety, technological, and nuclear waste management issues. Suitable site locations are identified in various parts of Finland.

After suitable sites have been guaranteed together with the respective municipalities, Fennovoima will complete the Environmental Impact Assessments. In these studies Fennovoima will utilize the extensive experience of E.ON, the second largest nuclear power generator in Europe.

"By participating in Fennovoima, Outokumpu aims to secure a significant portion of its electricity needs in the years to come. In investing in our own energy production we can have a reliable electricity supply at production cost. Our aim is to have up to 150 megawatt of the new nuclear power plant's capacity. This translates into some 1.2 terra-watt hours of electrical energy per annum which is more than half of what the Tornio Works currently requires," said Outokumpu's Chief Executive Juha Rantanen.

Rauman Energia is a Finnish middle-size and city-owned energy utility and Katternoe is a middle-sized, municipality-owned energy utility.

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